Are you drowning in debt and ready to take control of your finances? Many things you do, even on a daily basis, affect your financial situation. From your morning cup of coffee to how well you use your budget, all of your decisions can drastically change how much money you have sitting in your bank account.
Use the following guide of eight do’s and don’ts to take control of your finances.
Do Use a Budget
Having a budget is one of the most effective ways to monitor your spending, make cuts where necessary, and save or pay off debt. Your budget puts you in charge of your money, not the other way around. Create a budget that is realistic to your lifestyle.
Don’t Ignore the Budget
The first step is to develop the budget. However, if you never look at it again, how useful is it really? You need to always refer back to your budget and follow what you have. The first few months will be the adjustment period as you get used to your new money system. After a while, though, you’ll be more inclined to follow your budget once you see how helpful it is.
Do Have a Savings Plan
Do you have a savings plan? If not, part of financial success if having one. Your savings plan is how you’ll consistently set aside money for whatever your goal is. It could be saving for college, building your emergency fund, or having enough spending money for your upcoming vacation.
Don’t Dip Into Your Savings Plan
It’s tempting to dip into your savings account as it grows. Remember, though, that you created that savings account for a reason. Avoid taking money out of it; that is why you create an emergency savings to account for unexpected expenses.
Do Use Small Loans for Emergencies
If you don’t have enough cash in your emergency fund or don’t have one at all (which in that case, it’s time to make one), you have access to small personal loans for quick cash. An example would be Credit Ninja. You can use that money to pay off the unexpected expense, and put your next paycheque towards paying back the loan.
Don’t Use the Small Loan for Leisure
You don’t want to abuse those small loans, or you may find yourself in a cycle of never ending payments. Their interest rates are quite high, making the loan more expensive in the long run.
Do Have an Investment Account
Investment accounts are a way to grow your savings month by month. When you set aside money into an investment account, the rate of return is what you’ll gain each month.
Don’t Put All Your Money Into One Investment
A major investment mistake is to put all of your money into one investment rather than distribute your money amongst multiple investments. If all you had was the one account and something happened to it, you could end up losing everything.
Use this guide to help you take control of your finances. The more you educate yourself on the different tricks of money, the better chance you have of getting yourself out of debt and enjoying a steady flow of cash.